Pyramid Selling

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 7th February 1972.

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Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford 12:00 am, 7th February 1972

asked the Secretary of State for Trade and Industry what further action he intends to take against persons and companies who indulge in the practice of pyramid selling.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

In the case of one company a petition has been presented for its winding-up. I am also considering whether some more general action is needed to deal with the practice of pyramid selling.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

Is the hon. Gentleman aware that many of these companies spring up like mushrooms, bleed thousands of unsuspecting people of their life savings by filling them up with stories of making £80,000 a week and then, when the going gets too hot, disappear like smoke? I have had many complaints about one of the companies which the hon. Gentleman's Department has investigated and decided not to prosecute. Will the hon. Gentleman take it from me that it is no good making investigations under the Companies Act in these cases? The right thing to do is to make this vile practice illegal.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

Even if legislation were to be introduced it would take a very long time before it could become effective. In the meantime we have, I believe, investigated four companies and petitioned for the winding up of a fifth.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

It is now many weeks since I sent the Minister a good deal of information about this practice. Has he yet made up his mind what he intends to do?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

As I said in answer to the hon. Member for Watford (Mr. Raphael Tuck), we are actively considering what would be the proper action, if any, to take. I should have said that we have investigated two companies and that a further two are about to be investigated.